15.4 C
Tuesday, March 21, 2023

Alert in dLocal due to the fall in its shares after a class action lawsuit in the United States

Must read

- Advertisement -

The company suffered in the middle of November last year the biggest stock market fall in its history, when its shares plummeted 50.71% after revealing a lapidary report by Muddy Waters Capital that denounced a “possible fraud” by the company.

- Advertisement -

Since then, DLO titles have had a slow and gradual recovery. As of February 15, 2023, three months after the debacle, almost 60% of what was lost had been recovered. But now a new document complicates the rally.

What is the class action lawsuit against dLocal about?

The presentation before the highest US court of justice was made by the law firm Bragar, Eagel and Squire PC The firm called on all investors who have acquired securities of the company in its 2021 IPO to contact before May to obtain more information on the claim.

In a public statement, the law firm accused the Uruguayan company of incorporating “false statements of material facts” and omit many others in their financial reports.

- Advertisement -

In June 2021, more than 33.8 million shares at US$21.00 eachaccording to the document, which recalls that the registration statement “repeatedly promotes dLocal’s alleged ‘increasing and deepening relationships’ with new and existing global business customers,” and “tells potential investors that dLocal measures its success by its performance in terms of total payout volume.”

According to Bragar, Eagel and Squire PC, the company “offers historical POS data” to justify its narrative that it has a “solid track record”. In addition, in the registration statement, the Uruguayan unicorn warns that “a plan is being implemented to improve internal controls in the financial reports”.

Still, consistent with Muddy Waters Capital’s report last November, the law firm argued that in these documents, the company misrepresented the POS “derived from new merchants in 2019 and 2020 from dLocal that, at the time of the initial public offering, were well below what the registration statement reported.”

Meanwhile, Bragar, Eagel and Squire PC recalled in their statement that, when “the truth about the POS and internal controls” became known, their shares plummeted by more than 50%, causing investors to lose “hundreds of millions of dollars.”

Source: Ambito

- Advertisement -

More articles


Please enter your comment!
Please enter your name here

- Advertisement -

Latest article